Do rural regions benefit from entrepreneurship?

Entrepreneurship and regional development in rural areas
Every story about entrepreneurship is unique but also shares elements in common. In the analysis that follows, I attempt to identify these common elements, while preserving the uniqueness of each story.

In this article I examine entrepreneurship and regional development in rural areas, which today are finding new ways of stimulating and sustaining development and growth. Regional development is an important political and economic issue. In Europe over 56% of the population resides in rural areas, which must find ways to achieve sustainable regional development in order to slow down or even reverse the trend toward migration to urban areas. Entrepreneurial actors play a key role in the regional development process. The creation of new enterprises and initiatives can result in new jobs, new wealth, and innovations which contribute to the economic vitality of regions and their communities.

Despite the widespread focus on job creation, growth and other economic outcomes, there are other forms of value that entrepreneurship generates. Entrepreneurship contributes positively to rural communities by generating social value, such as enhancing community life and maintaining a commercial infrastructure [1], which may draw attention to the area and slow out-migration (or even encourage in-migration).

However, different types of social value are created through different entrepreneurial activities in rural settings. I attempt to illustrate the interplay between the local context/resources, entrepreneurship and social value creation. In other words, the questions I am asking revolve around how entrepreneurs draw from the local context to create unique activities; how these unique activities result in social (regional development) outcomes, and how these outcomes feed back into and thus enrich the local context and resource base, serving as a fertile ground for new entrepreneurial activity and regional development.

Who is an entrepreneur & what are entrepreneurial activities?
In this section I will draw attention to three unusual forms of entrepreneurship found in rural areas of Denmark. These do not necessarily fit in to our conventional understanding of entrepreneurship as a formal start-up of business. Rather in this context I view entrepreneurship from a functional perspective. The entrepreneurial function is carried out by entrepreneurial actors who create value [2] by (re)combining existing resources from an environment in a unique way. These recombined resources are then introduced to a local or general market.

The cases presented are drawn from preliminary findings of an ongoing qualitative study in different Danish rural regions. To be entrepreneurial does not necessarily mean to set up a formal business, but can also include entrepreneurial activities with multiple stakeholders. Entrepreneurship is found in a wide variety of activities and setups. The cases discussed in the following represent three different entrepreneurial setups; a formal but unconventional business (Gram Slot), a museum (Økomuseum) and an association (Primanet).

The data were collected in 2011 through two-hour semi-structured interviews with their founders, field notes, observations and photographs from a tour through the businesses and their surroundings. In addition, publicly available documentary material such as newspaper articles or marketing information was collected.

A castle which transforms the local landscape: Gram Slot
Gram Slot is a restored castle in a rural area of 2.500 inhabitants in southern Jutland. For 25 years, the castle was just an empty building; however, since 2007 it was transformed by entrepreneur Svend Brodersen into a conference centre, nature school, camp for children, exhibition centre, and restaurant business. The castle was restored and renovated in accordance with the traditional craftsmanship methods and materials. The farmyard was transformed into modern hotel apartments and the stables into a two story exhibition centre which attracted 12.000 visitors to the castle’s first Christmas market in 2011. Gram Castle is also a producer of local organic agricultural products, such as milk, cheese, flour and potatoes. The original kitchen in the basement has been maintained and is used today for team building events where teams are cooking with traditional methods and ingredients.

Around 10 local craftsmen are employed to take care of all the renovations and daily maintenance of the castle. The craftsman use local wood and materials and traditional methods to build everything from doors, tables, or window frames. This way a newly made door is ensured to fit aesthetically with the existing structure but also is made to function for many decades.

The castle today offers employment for 25 people in a multitude of different functions, ranging from carpenters, fair/conference coordinators, nature guides, and matrons or livestock managers. Some of the jobs are occupied by physically challenged and long-time unemployed from the region. Gram Slot is part of a shared heritage in the area and has reinstated passion and pride for its history, traditions and surrounding nature after the many years of inactivity.

A museum that builds togetherness: Samsø Økomuseum
The Økomuseum is located on Samsø, an island inhabited by around 3.900 people. The museum builds on three principals: identity, humanity and participation. The director Lis Nymark, who transformed the original history museum into an eco-museum in the 1990s, emphasizes that the museum today is a “living museum”. The museum manages nine visiting sites around the island, including a blacksmith’s shop dating from 1928, a merchant’s house from 1844, and a windmill from 1859. All these old buildings have been restored and are kept as part of the island’s history. Besides the 14 full-time and part-time employees, the museum has around 80 local volunteers. These various, dispersed sites are part of the living museum concept. They are operated and maintained by local volunteers, who in self-organized groups take responsibility for each of these nine places. For example a group of volunteers works with old crafts such as lace-making, spinning and weaving a large farm house from 1917. Or a group of volunteer blacksmiths forge in the old shop from 1928. All of these groups are part of protecting the heritage and disseminating knowledge to the visitors. One of the main purposes is to encourage the community to ‘own’ these activities based on their own environment and tradition. By creating ownership and participation in their local history and traditions, the Økomuseum helps building a strong cultural affinity, togetherness and a sense of belonging. This is especially important for in-migrants who are in search of establishing roots to the place.

An association that builds infrastructure: Primanet
Primanet was inspired to develop an IT community in the north-east of Jutland, in a province called Norddjursland, to provide this rural community fast and high-quality wireless internet. The motto “everyone can join” reflects Primanet’s philosophy since it was founded in the year 2000.

At the time Primanet was founded, big network providers did not want to invest in building the infrastructure needed to provide only a few villages and farmers with internet. The municipality of Norddjursland has 24.000 inhabitants and is generally characterized by large open spaces and farmland. Primanet is a non-commercial local association and today is the largest provider of wireless internet in Norddjursland. It now has over 3.000 members which makes it one of the largest associations in Jutland. Primanet is 100 % member-owned, debt free and had a turnover of roughly 4.6 million Danish Kroner in 2011. The revenue is continuously reinvested into the maintenance and development of the network.

As of 2011 Primanet provides jobs for 5 employees who are mainly responsible for physical maintenance and support. In addition, telephone support, board membership activities or server management are mainly handled by the many volunteers. Many of these volunteers are retired locals who found a way to contribute to and be active in their local community. Still Primanet’s main activity is the technological supply of wireless internet. But in recent years a number of side activities have emerged, such as the setup of internet hotspots on camping sites and ferries, a web-hosting service called Primahost, and a web programming service which offers uniquely programmed or template-based websites.

The interplay between context, entrepreneurs and regional development
These three cases are each in their own way unique. However the entrepreneurs involved all draw from local resources and create social value for their local environment. To highlight this dynamic value-creation process and compare the cases, I will discuss (1) how the entrepreneurs draw from the local context, (2) how the entrepreneurial activities create social value for their rural communities, and (3) how the rural communities subsequently are enriched by these value-creating activities.

All three cases are unique, in concept, story and purpose. But all of them demonstrate how entrepreneurs draw from the resources of their local environment and contribute to regional development. Each case is uniquely embedded in its local context, and would be different in form and substance if originating or transferred somewhere else.

The figure below provides a simplified model of the interplay between local context and resources for entrepreneurial activities, which subsequently contribute to both economic and social regional development outcomes. These outcomes in turn transform the local context and resource base which may encourage new entrepreneurial activities. The three questions each represent one arrow in the model and are discussed below.

In the circle above, the first arrow relates to how entrepreneurs draw on the inherent (and sometimes place-bound resources of the rural area they operate in. Gram Slot utilizes the old empty buildings full of history, heritage and tradition; the landscape, produce and soil; the crafty and knowledgeable locals to create a unique business concept, which has transformed the landscape around and put it on the map for tourists and locals alike.

The Økomuseum makes use of the cultural and historical sites of the area and the local knowledge and people who keep the traditions alive. Thereby the museum helps to maintain the special historic features of Samsø, which can be valuable both for locals and tourists.

Primanet exploits the very reasons that none of the big providers wanted to invest in the area: Households are few and scattered over a large area, which is empty, flat and does not have tall buildings allowing Primanet’s wireless technology to work well. Primanet also makes use of local people: its volunteers who maintain the support function, and its many members, who mount wireless masts on top of their silos or roofs. After all it is “their own” internet technology.

Entrepreneurial activities create multiple forms of economic and social value for their rural area (arrow 2). The entrepreneurial projects presented not only create economic value (e.g. tax and tourism income, job creation, growth) but also social value for the local community. For example, at Gram Slot, giving hard-to-employ persons the opportunity to work helps build their self-worth and sense of belonging. By transforming the old empty buildings, the castle gardens and 440 hectares of land into organic agriculture, Gram Slot contributed to restore the landscape and natural amenities and not least draws attention to the area.

Most of the volunteers working for the Økomuseum are in their mid 50’s and more than half of them have immigrated to the island. The volunteers do not just have an opportunity to learn about the local history, but also become a part of it and thereby enhancing their sense of belonging to the community. They become part of a local social network as the Økomuseum’s over 80 volunteers are a workforce of passionate self-selected stakeholders. They have developed such a strong affinity to “their” sites that they sometimes even invest with their own money, for example to fix a broken window or paint outer walls when the museum cannot afford it. Not only do these activities restore the natural scenery, but it creates ownership and a sense of togetherness as these volunteers see these places as part of “their” history and heritage that needs to be protected.

Similar to the Økomuseum most of Primanet’s volunteers are retired or hard-to-employ persons because of illness or age. Primanet offers an opportunity for these people to become engaged with their local community by being a part of building an entire infrastructure, which restores a sense of self-worth of people.

Finally, how does this all relate to a new enriched local context? These social outcomes transform a place (arrow 3). A transformed place provides new or different human, social, cultural or physical resources which may inspire new entrepreneurial activities.

Gram Slot has restored the empty, run-down buildings in the area which has contributed to a positive transformation of the landscape, which in turn has made the area a more attractive place for tourists and other business to set up camp. The castle has revitalized an entire area and made it known for their excellent organic produce, which benefits other organic farmers in the area who gain from the positive place branding.

The Økomuseum has helped the people engaged in it to feel a strong sense of belonging to the island and are proud to be ‘Samsinger’ (i.e. people living on Samsø). The old traditions and craftsmanship are treasured and kept alive which has inspired people, let us call them entrepreneurial actors, to make authentic crafty Samsø products sold on the island and outside.

The sudden availability of Primanet’s internet infrastructure has transformed an area that was rather unattractive for certain businesses, into an area where these business can operate and do not have to relocate from the area.

The cases all extract a variety of resources from their surrounding context. These resources are then combined and/or transformed in a unique way to create very distinct local entrepreneurial activities. These activities contribute to regional development not only in economic terms, but more important the communities benefit largely from the many social outcomes.

Such outcomes however are much harder to measure in simple monetary terms, as these are much more long-term, interrelated and rather complex. Even if economic benefits are easier to measure, it is worth investigating the wide variety of social value that entrepreneurial activity brings with it in rural settings.

Implications for Policy, Practice and Education
Today, policies are often based on a “best-practice” approach inspired by what other regions or countries do, rather than develop their own context-specific program. Other regions’ policies, as they are today, often lack understanding of the individuality of a local place and its resources [3]. Therefore, regional policy makers need to acknowledge that regions are diverse, and consequently different and more localized measures need to be developed to promote local entrepreneurship.

Regarding practice, case studies such as these could inspire potential entrepreneurs of how to make use of local, maybe even place-bound, resources. Even though every context is unique, stories of entrepreneurial experiences can be inspiring for other aspiring entrepreneurs living in rural areas.

Even though entrepreneurial activity may statistically be lower in some regions, unique entrepreneurial activity can emerge by utilizing the local resources and transform those into viable entrepreneurial (business) activities. There are different opportunities in different regions; therefore entrepreneurship education should focus on integrating regional and local aspects, such as place-specific historical, cultural or natural resources.

In conclusion, this article highlights the many creative ways entrepreneurs in the rural contribute to their local communities. Rural entrepreneurs are capable of utilizing the resources that are around them to create quite unique, and context-specific entrepreneurial activities. Looking at the example cases, it seems like a give and take relationship between a place and the entrepreneurs. The entrepreneurs take resources from the local context, transform them into viable activities, and give (economic and social) value back to the local context. And not just by accident, it seems it is a conscious choice or even a goal to be able to contribute to their local community while making a living for themselves.

It may not always be the typical formal businesses that grow a certain percentage or have a certain profit per year, which we ought to focus on when we examine regional development issues in rural settings. Instead, it is crucial to acknowledge the importance of the sometimes unconventional entrepreneurial activities, whose outcomes do not always fit strictly with traditional ideas of growth, but nonetheless have a positive and long-term social impact on these rural places and their communities.

References
1.    Laukkanen, M. and H. Niittykangas, Local developers as virtual entrepreneurs - Do difficult surroundings need initiating interventions? Entrepreneurship and Regional Development, 2003. 15(4): p. 309-331.

2.    Anderson, A., Paradox in the periphery: an entrepreneurial reconstruction? Entrepreneurship and Regional Development, 2000. 12(2): p. 91-109.

3.    North, D. and D. Smallbone, Developing entrepreneurship and enterprise in Europe's peripheral rural areas: Some issues facing policy-makers. European Planning Studies, 2006. 14(1): p. 41-60.

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